Deficit Account Policy

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The University of Wisconsin-La Crosse has established a Deficit Account Policy to provide accounting controls and procedures for the management of university accounts. The Deficit Account Policy requires that departmental accounts are to be managed by individuals authorized for the account within the approved expenditure budget on a monthly and annual basis for each fiscal year.

An account is in a deficit status if the commitments exceed the resources. The budget at the individual account level represents the total resources of the account. If encumbrances plus expenditures exceed the budget, the account is in deficit. The individual authorized with account authority has responsibility for the account as reflected on the PeopleSoft Financial WISDM System. The University’s Controller retains the official record of authorized individuals for each university account.

At the end of each month, the Budget Office will prepare a report of all operating accounts in deficit status. Notification will be sent to each authorized account manager with a deficit account and also provided to their supervisor, division head, and Vice Chancellor for Administration and Finance. It is the responsibility of the authorized individual to provide an explanation for the deficit account and plan for eliminating the deficit within the next thirty-day reporting period after the deficit account notice.

If the authorized account manager, their supervisor and the Budget Office determine that the deficit cannot be eliminated by the end of the fiscal year, the account shall be balanced with an internal loan and interest will be charged at the rate earned by the University. The internal loan must be repaid within one fiscal year.  All internal loans shall be reported to the unit supervisor, division head, and Vice Chancellor for Administration and Finance.

Exceptions to the Deficit Account Policy will be allowed for grant and contract expenditures when timing differences result from reimbursement of expenses to the University by the grantor and for other reasonable expenditures made in anticipation of the timely receipt of account funds.

Drafted: 8/04/2008

Updated: 6/25/2015